Marc Faber: Stock Market Rally ‘Will End Badly’ So Buy Gold

Marc Faber, publisher of the Gloom, Boom & Doom Report, thinks stocks have shot to overvalued levels; therefore, it continues to make sense to own gold.

Stocks will either endure a 20 percent correction this year before making a definitive move higher, or they will suffer through a 1987-style crash, when the market rose early in the year then dropped more than 20 percent in a single day in October, he tells CNBC.

Faber sees gold’s 18 percent drop from its record September 2011 high (to $1,569 an ounce early Friday) as a correction.

“I want to have something that is not a financial asset,” Faber says. “I have bonds, I have real estate and I have equities.” Equities and real estate are similar, even though they don’t always move in tandem, he adds.

“A lot of these are paper assets, whereas gold physically held in a safe deposit box outside the U.S. has relatively low risk.”

In addition, Faber notes, “I would rather buy something that is relatively depressed than something that is relatively high.”

Meanwhile, some gold market participants see the 236,000 gain in U.S. February payrolls as a bearish sign for the precious metal.